Trade Conditions Between S.Korea, US under Trade Deal To Largely Stay In Place Despite Tariff Ruling
SEOUL, Feb 21 (Bernama-Yonhap) -- The South Korean government on Saturday vowed to put in utmost efforts to counter mounting trade uncertainties after the US Supreme Court struck down President Donald Trump's sweeping "reciprocal" tariffs on South Korea and other trading partners, noting the export conditions secured through its trade deal with the United States will mostly remain in place.
According to Yonhap News Agency, the Ministry of Trade, Industry and Resources convened an emergency meeting to assess the impact of the ruling and discuss Seoul's strategy for the Trump administration's tariff policies, officials said.
The move came after the U.S. Supreme Court ruled against Trump's use of the 1977 International Emergency Economic Powers Act (IEEPA) to justify duties on Friday (U.S. time), including the reciprocal tariffs, upholding a lower court's ruling.
Following the legal defeat, Trump signed a proclamation to impose an additional 10 per cent global tariff and vowed to undertake other tariff measures under different legal provisions.
The ministry said it has been working to devise a response to the anticipated situation following the ruling, vowing continued efforts to minimise export uncertainties for Korean companies.
"Although the ruling increased uncertainties surrounding exports to the U.S., the overall export conditions secured through the Korea-U.S. tariff agreement will largely remain intact," Industry Minister Kim Jung-kwan said.
Kim said the government will comprehensively review the details of the ruling and follow-up measures by Washington to respond with "full force" to best safeguard Korea's national interest.
Regarding the tariff refund issue, which is not clearly stated in the U.S. ruling, the ministry said it plans to work out support measures to minimise the harm to Korean companies.
The ministry also plans to hold a meeting with private industries on Monday to assess the impact of the latest development on domestic industries.
Meanwhile, experts here said it will be difficult for Korea to renegotiate the terms of its trade deal with the US despite the changed situation.
"Considering Trump's negotiation style and the overall atmosphere of ongoing talks between Korea and the US, it will likely be difficult to reopen discussions on the investment pledge that has already been agreed upon even if the level of pressure from the US government somewhat eases following the Supreme Court's ruling," said Austin Chang, president of the institute for international trade under the Korea International Trade Association (KITA).
Seoul has recently been under pressure to expedite its implementation of its trade deal with the U.S., with Trump threatening to raise "reciprocal" tariffs and auto duties on Korea back to 25 per cent, citing Seoul's lack of efforts to legislate a special bill to support its investment pledge to the U.S.
Under the deal finalised in October, Korea agreed to invest a combined US$350 billion in the US for cooperation in advanced industries and shipbuilding.
"The biggest issue of interest will be how the latest ruling will affect the Korea-US trade agreement, but we can face a considerable backlash while attempting to take initiative on this matter right now," said Yoon Heo, an economics professor at Sogang University.
Cho Seong-dae, head of the trade policy research office at KITA, said the US can impose additional sectoral tariffs anytime under different provisions, such as Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974, noting the Trump administration may introduce stronger tariff measures to replace reciprocal tariffs, resulting in heightened uncertainties for Korean firms.
On the tariff refund issue, Cho said it is not a "simple" matter, as the subject that can file for a refund varies by trade deal, and the process itself is complicated.
-- BERNAMA-YONHAP
